Richard Sear, vice president–visionary innovation at Frost & Sullivan, acknowledged that fact during his presentation this morning at the Yokogawa Users Group Conference in New Orleans. But then he went on to emphasize—in a whirlwind tour of the megatrends that will need to be addressed by 2020—just how important it is for companies to innovate.
"We really have to look farther out in the future. The time for us to innovate is shortening dramatically," Sear said. "Over the next 10 years, 60% of the companies that exist—small and large—are going to disappear…because they've been out-innovated."
Sear focused the audience's attention on nine key areas where megatrends will have a global, transformational and sustainable impact on the way we think about business: urbanization, "smart" as the new green, social trends, new business models, technology, mobility, economies, infrastructure and healthcare.
The City as Customer
Much of the discussion centered around the changing face of the world's population. Sear talked about urbanization leading to the "city as a customer." More societies pushing from agrarian to service-based cultures will lead to the evolution of mega cities; mega regions (the aggregation of cities); mega corridors (the connection of cities along some sort of throughway); and mega slums, a term that Sear said he dislikes, but that describes the informal settlements in which some 837 million people live today.
Cities overall are having a disproportionate impact on the GDP of countries that they reside in. But perhaps more significant are the approximately 2 billion people who will be living in mega slums by 2020. That's out of a total world population of 7.5 billion people, representing a huge relatively untapped market. "It's really quite an interesting phenomenon," Sear said. "They've gone from something that we don't really want to deal with to now something largely being viewed as center of commerce."
This is particularly an issue in Africa, where currently only one mega city exists. In Nigeria, they're looking for ways to integrate the slums into a formal economy. "The way that this is trying to be addressed is to raise the living standards in these cities," Sear said, mentioning the ability to provide sanitation services into the slums, and a way to provide a form of living that makes people feel like they belong to something.
Africa is probably one of the most interesting places in the world, Sear commented. "At the moment, they don't have the broadband access to make them innovative, but they soon will," he said. The continent is struggling with its telecom infrastructure, but will see it emerge in the years to come.
More Devices, All Connected
We're living in an increasingly connected world, with more than 80 billion devices expected to be digitally connected by 2020. Frost & Sullivan predicts there will be 10 connected devices for every household; five connected devices for every user (what Sear considers a conservative number); 5 billion Internet users; and 500 devices with unique digital IDs per square kilometer.
"Forget privacy. It will not exist," Sear said. "You will have to just deal with the idea that your information will be out there."
It was the notion of reduced privacy and the contentious issue of rising healthcare costs in the United States that created perhaps the most buzz following Sear's presentation—particularly with the idea that people could someday reduce their health insurance premiums by getting a chip implanted in themselves.
Insurance companies are "adamant," Sear said, that healthcare cost issues will be solved with such implanted chips. "Choose a low premium and you're chipped; a higher premium and you're not. But that option might also disappear over time." Sear described it as the only way to manage healthcare costs, "no matter who wins the election next week."
Some other provocative technologies that Sear spoke of included an array of technologies such as "actual" smart meters in the home that could adjust room climate based on who's in the room, and switch the house off and turn on security when you leave; smart bandages that not only help the healing process, but also know when to change the bandage when it reaches its minimal point of efficacy; virtual dressing rooms for online shopping that work with in-home holographics incorporating touch-sensitive pads to also get the feel of the clothing; combining social networking with technology to help you know what products to buy at the grocery store; smart cars in an era of "micromobility"; and more.
All in all, here's how Sear sees the future in 2025:
- Robots will be in your home, performing repetitive tasks.
- Digital assistants will guide our everyday lives, and to a large extent they will do it intelligently and autonomously.
- Cars will have many autonomous functions that will provide advanced driver assistance functions.
- Most government buildings in the United States will be carbon-neutral.
- You will most likely live in a city that wants to be smart or sustainable.
- We will have multiple devices monitoring our wellbeing, and designer drugs will begin emerging.
- Facebook will have been out-innovated in the virtual world.
"Every company needs to be thinking about how these trends will affect their businesses," Sear warned. "Because if you're not, you can bet someone else is."